IN THE CONSUMER DISPUTES REDRESSAL FORUM, ALAPPUZHA
Thursday the 30nd day of August, 2018
Filed on 17.03.2016
Present
1. Sri.E.M. Muhammed Ibrahim , BA,LLM (President)
2. Smt. Sheela Jacob (Member)
in
CC/No.85/2016
Between
Complainant:- Opposite party:-
Sri.K. Rajendran 1. M/s Life Insurance Corporation of India,
S/o Krishnan Chettiyar, CRM, LIC of India,
Raj Nivas, Cheravally, Divisional Office,
Kayamkulam, Nagambadam,
Alappuzha. Kottayam- 686001
(By Adv. Cheriyan Kuruvila) Rep.by the Manager
2. The Branch Manager
LIC of India, LIC Junction,
National Highway,
Kayamkulam,
Alappuzha.
(By Adv. P.K.Mathew)
ORDER
SRI.E.M. MUHAMMED IBRAHIM.B.A.LLM (PRESIDENT)
This is the consumer complaint filed Under Section 12 of the Consumer Protection Act, 1986 against 2 opposite parties.
2. The averments in the complaint in short are as follows.
The complainant preferred a complaint to the Insurance Ombudsman on 03-10-2015 seeking intervention to release the amount due to the complainant from the LIC of India. The term of the policy was 10 years commencing from 15-07-2005. The first year premium payable was Rs.2,35,700/- and the date of last payment was 15-07-2014 and the date of maturity as per the terms and conditions of the policy specifically explained to the complainant. The plan allows partial withdrawal from 4th year onwards and loan facilities after 3 years. The complainant was constrained to make 2 partial withdrawals amounting to Rs.4,88,704/- to meet the expenses for the Angioplasty done at Apollo Hospital Chennai. On account of the partial withdrawal, the opposite parties unilaterally reduced the death sum assured from Rs.50,00,000/- to Rs.40,00,000/-, though such a condition was not brought to the notice of the complainant at the time of joining the policy. Even after effecting the partial withdrawal he has continually remitted the premium amount without any default and altogether he remitted Rs.11,38,150/-. However at the time of maturity the balance amount available in the policy was Rs.6,49,446/- but the opposite parties offered only Rs1,92,358/-, which is far less than the actual amount on the maturity. The opposite party sent a notice to the complainant and offered payment of Rs.1,92,358/- and the LIC was omitted to pay Rs.4,57,088/- without any justification whatsoever.
3. The complainant preferred a complaint to the Insurance Ombudsman on 03-10-2015 seeking intervention to release the amount due to the complainant from the LIC of India. But without hearing the complainant, as per letter dated 12-10-2015, the Ombudsman informed the complainant that the decision of the insurance company is as per the terms and conditions of the policy. The said finding of the Insurance Ombudsman is not correct. The terms and conditions in policy lack clarity, transparency and hence there is deficiency in service from the part of the opposite parties. When the complainant has withdrawn Rs.2,00,000/- in the month of February 2009, the opposite parties reduced the sum assured as death benefit, but they never informed the complainant of the non payment of the balance amount in the account.
4. The opposite parties permitted partial withdrawal of the amount remitted by the complainant, without informing or intimating or imposing any conditions regarding the payment of the balance amount available in the policy account. When the complainant approached the branch office of LIC at Kayamkulam for partial withdrawal, he was permitted to withdraw the amount without imposing any condition and without enlightening him of the forfeiture of the amount remitted in the credit of the policy of the complainant. Had there been any condition in the policy or intimation by the opposite parties at the time of withdrawal regarding the forfeiture of the balance amount remitted by the complainant, the complainant ought not to have withdrawn the amount, instead, he would have availed loan from some other sources or banks.
5. It was imperative on the part of the opposite parties to inform all the terms and conditions of the policy, including the terms for partial withdrawal with precision and transparency at the commencement of the policy. Since that was not done, there was apparent service deficiency on the part of the opposite parties. They canvassed the policy by illegal and fraudulent manners and means, suppressing several material facts. Permission accorded for partial withdrawal implies payment of at least the balance amount remaining in the account with interest and loyalty, if not the sum assured. On 26-05-2015, the complainant sent a notice to the opposite parties asking them to clarify the manner in which the final figure for the payment of the amount payable to the complainant was calculated and informing them that he cannot part with the amount already remitted in the policy. But the opposite parties didn’t care to release the amount remitted by the complainant. The acts of the opposite parties amount to deficiency in service. On account of the acts and omissions of the opposite parties, the complainant has sustained huge monetary loss. The opposite parties have forfeited an amount of Rs.4,57,088/-, the hard earned money remitted by the complainant, believing the assurances of the opposite parties pertaining to the financial benefits. The acts of the opposite parties have caused much mental agony, frustration, disappointment and embarrassment to the complainant apart from huge financial loss. The opposite parties are liable to pay the amount remitted with usual benefits, loyalty and to compensate the complainant for the loss and damages sustained by him on account of the aforesaid acts, omissions, dereliction and deficiency in services by the opposite parties. Hence the complaint.
6. The opposite parties entered appearance and resisted the complaint by filing a joint written version. Subsequently the opposite parties have got amended the written version and also filed an amended version on 18.02.2017. the contentions in the amended written version are as follows.
7. The petition is not maintainable either in low or on facts. The complainant is not a consumer as defined under section 2 of the Consumer Protection Act. Hence the complaint has to be filed before the civil court by paying proper court fee. However the opposite parties would admit that one Jeevan Saral Policy bearing No. 393281251 (Table 165) was issued to the complainant by Kayamkulam branch office of the LIC. The opposite parties also would admit the date of commencement, term of policy and date of maturity of the policy and the death sum assured as claimed by complainant. However it is contented that the maturity sum assured under the policy is Rs.18,49,600/- and accident benefit sum assured is Rs.5,00,000/-. Jeevan saral is a policy which provides for risk coverage on death irrespective of age of the life assured. In other policies usually premium increases with age for the same death coverage. In jeevan saral, maturity sum assured depends on age of the assured and will be higher for younger age for the same premium. Policy certificate clearly defines death sum assured, maturity sum assured, accident benefit rider. On 21.07.2006 policy holder applied for alteration in mode of premium payment from yearly to quarterly. Premium due from 15.07.2006 was altered to quarterly premium Rs.60,125/-. On 03.02.2009, the petitioner availed partial surrender for Rs.2,00,000/-. On 27.05.2010 he availed the second partial surrender of policy for Rs.2,88,803/-. The conditions and privileges in the policy document clearly explain partial surrender. On completion of three or more years from date of commencement and payment of premium for at least three full years, partial surrenders shall be permitted. This will be effected by reducing the annual premium under the policy and corresponding reduction of maturity and death benefits. The surrender value corresponding to the amount by which the annual premium is reduced shall become payable on a partial surrender. In case of rider benefits, the additional benefits and premiums payable will also be proportionately reduced. After the first partial surrender, instalment premium reduced to Rs.30,575/- and after second partial surrender instalment premium reduced to Rs.4,900/-, death sum assured corresponding to this premium is Rs.4,00,000/- Maturity sum assured is Rs.1,47,968/- and accident benefits sum assured is Rs.4,00,000/-. In connection with the maturity of subject policy on 15.07.2015, the 2nd opposite party sent advance intimation to the petitioner in respect of the maturity amount of Rs.1,92,358/- 40 (Total of maturity sum assured Rs.1,47,968/- and loyalty addition Rs.44,390/40). As the petitioner did not submit the requirements in spite of repeated reminders maturity claim stands unpaid. Detailed calculation of benefits and premiums at various stages are as follows :-
07/2005 to 07/2005 yearly @ 235700 x 1 = 235700
07/2006 to 07/2008 Quarterly @ 60125 x 9 = 541125
10/2008 to 10/2009 Quarterly @ 30545 x 5 = 152875
01/2010 to 10/2014 Quarterly @ 4900 x20 = 98000
Total amount of premium paid = 10,27,700/-
The death sum assured = Basic monthly premium X 250. The death sum assured the first partial surrender is Rs.10150 X 250 = 2,537,500/-.
It is also contended that the maturity benefit offered to the complaint is in full conformity with the terms, conditions and rates applicable. The petitioner has conveniently chosen to ignore the fundamental principle on which the LIC is based. Out of the premium amount paid under each policy the LIC has to utilise the major portion in granting insurance protection for the life assured as also in meeting the varied expenditure incurred in running the business. The balance left to the credit of the policy that is payable as assured value. The opposite parties would also admit that the non mention of the maturity value is a clerical omission. Thereafter the opposite parties never committed any illegal action against the complainant. The compensation claimed is highly excessive and not based on factual foundation or data. It is highly boosted up and is based on surmises and hypothesis and no amount can be granted on any head claimed. There is no deficiency in service on of the part of the opposite parties. The opposite parties would pray to dismiss the complaint with compensatory costs.
8. In view of the above pleadings the following points arise for consideration are:-
(1) Whether there is any deficiency in service or unfair trade practice on
the part of the opposite parties
(2) Whether the complainant is entitled to get the relief prayed for?
(3) Reliefs and costs.
9. Evidence on the side of the complainant consists of oral evidence of PW1 & PW2 and Ext.A1 to A7 documents.
10. Evidence on the side of the opposite parties consists of the oral evidence of RW1 & Ext.B1 to B7 documents.
Though sufficient opportunity was granted both sides turn did not up and advanced arguments. However the learned counsel for the opposite parties filed notes of arguments.
Point No.1 & 2
For avoiding repetition of discussion of materials these 2 points are considered together. Admittedly the complainant is a Jeevan Saral policy holder. Ext.A1 / B1 is the copy of the policy. In view of the oral evidence of PW1 coupled with Ext.A1/B1 policy it is clear that the policy was started on 15-7-2005 with the premium of Rs.2,35,700/- and the sum assured was Rs.50 lakhs. It is crystal clear that in order to get Rs.50 lakhs as maturity value, the complainant has to pay Rs.19,441.66/- per month. Therefore the quarterly premium to be paid is Rs.58,925/- it is also clear from the available value materials that the policy provides partial withdrawal and accordingly the complainant was constrained to make partial withdrawal and thereby he has withdraw Rs.4,88,704/- on two occasions in order to meet the medical expenses at Appolo Hospital Chennai.
According to the complainant the opposite parties have unilaterally reduced the death sum assured from 50 lakhs to 25 lakhs without making aware of the facts to the complainant. However PW1 who is none other than the complainant would admit during the cross examination that the LIC has is made aware the pros and cones of the terms and conditions of the policy. PW1 would admit that on 3-2-2009 he obtained Rs.2 lakhs by making 1st partial surrender and thereafter quarterly premium was only Rs.30,450/-, that he has also made the 2nd partial surrender and thereafter he paid the premium of Rs.1,600/- per month only. It is clear from the available materials that if the maturity sum was not reduced the complainant would have paid Rs.19,641.66/- per month as premium as agreed.
It is true that PW1 deposed to have paid Rs.11,38,150/- and he has withdraw Rs.4,88,704/- by way of partial withdrawal and therefore he is entitle to get the balance amount of Rs.6,49,446/- but he was offered Rs.1,92,358/- by the opposite parties which is assured of Rs.4,57,088/-. According to the complainant the LIC has forfeited Rs.4,57,008/- without any justification whatsoever. Inspite of filing A6 complaint before the insurance Ombudsman claim was repudiated by Ext.P7 order without hearing the complainant. According to the complainant the P7 order is incorrect and without any basis. The specific allegation of the complainant / PW1 in para 6 of the proof affidavit is that the terms and conditions of the policy lacks clarity and transparency and hence there is deficiency in service on the part of the opposite parties.
PW2 is a Chandra Das who is none other than the LIC agent (Agent of the opposite party). He has been examined by the complainant to prove his case. But PW2 would admit that he had given Ext.A2 letter stating the benefit of Jeeval Saral policy (table No.165). he would also admit that he had explained the terms and conditions contained in Ext. B3 policy introducing B2 document to the complainant. While joining the policy he would also admit that Ext.B4 to B7 are the circulars issued by LIC after taking policy and he made aware the complainant the terms and conditions stipulated in the B7 circular issued after the complainant taken policy. PW2 would admit that after effecting partial withdrawal premium amount will reduce and premium amount x 250 will be sum assured. If that be so after the second partial withdrawal the quarterly premium would be Rs.4,900/- only. On perusal of page No.2 of Ext.B3 document it is clear that the terms and conditions of the B1 policy has been clearly stipulated and in page No.4 clause No.14, the details of partial withdrawal has been stated. Clause 14.1 in B3 would indicate that in case partial withdrawal, the basic premium under policy shall be reduced and the withdrawal value would be demined under para 12 of the B3. Corresponding amount by which premium reduced will be paid subject to the condition. In view of the above materials it is clear that if partial withdrawals are made all benefits will get automatically reduced proportionately.
The oral evidence of PW1 & PW2 would clearly indicate that at the time joining the policy, PW2 has made the complainant aware of the terms and conditions in B3 document and the complainant was well aware of the same and the claim to the contrary is devoid of any merit. In the circumstances Ext.A7 finding of the Insurance Ombudsman in A6 complaint to the effect that decision of the insurance company is as per the terms and conditions of the policy conditions is legal and proper.
It is true that the Ext.B2 policy document does not specify the maturity sum other than the risk sum assured which may be a clerical mistake. It is brought out through RW1 and Ext.B1 policy and B3 introductory circular that the maturity sum assured would differ and the depend on the age of the assured and term of the policy conditions. Admittedly Ext.B2 document is dated 12-2-2014 which has been issued before issuing Ext.B1 policy PW1 & PW2 would also admit that the stipulations in B3 document has been made known to the complainant.
On evaluating the entire materials available on record we are constrained to hold that there is no deficiency in service or unfair trade practice on the part of the opposite parties. However the complainant is entitled to get back Rs.1,92,358/- offered by the LIC with interest on production of required document. However as the complainant has failed to prove any deficiency in service or unfair trade practice on the side of the opposite parties he is not entitled to get any other reliefs. Points answered accordingly.
In the result the complaint stands allowed in part directing the opposite parties to pay Rs.1,92,358/- (Rupees one lakhs ninety two thousand three hundred and fifty eight only) with interest at the rate of 9% per annum from the date of demand of the balance amount till payment within 30 days of receipt of a copy of this order on condition of production of required documents failing which the complainant is entitled to realise the said amount with interest from opposite party 1 & 2 and from their assets.
In view of the facts and circumstance of this case parties are directed to suffer their respective costs.
Dictated to the Confidential Assistant, transcribed by her corrected by me and pronounced in open Forum on this the 30nd day of August, 2018.
Sd/-Sri.E.M. Muhammed Ibrahim (President)
Sd/-Smt. Sheela Jacob (Member)
Appendix:-
Evidence of the complainant:-
PW1 - Rajendran K (Witness)
PW1 - P. Chandra Das (Witness)
Ext.A1 - Copy of Policy bearing No.393281251
Ext.A2 - Letter dated 26.06.2015
Ext.A3 - Copy of the Letter dated 26.05.2015
Ext.A4 - Copy of the letter dated 27.07.2015
Ext.A5 - Copy of the complaint dated 03.10.2015
Ext.A6 - Copy of the order of the Insurance Ombudsman dtd 12.10.2015
Ext.A7 - Copy of the letter from LIC of India
Evidence of the opposite parties:-
RW1 - Ganesh T R (Witness)
Ext.B1 - Copy of the office copy of the policy document
Ext.B2 - Calculation details of premium
Ext.B3 - Copy of the introductory circular dated 12.02.2004
Ext.B4 - Copy of the circular Ref: CRM dated 22.05.2007
Ext.B5 - Copy of the circular dtd 22.05.2007
Ext.B6 - Copy of the Bonus chart
Ext.B7 - Copy of the circular Ref: Actl/PS/2136/4 dtd 09.04.2008
// True Copy //
By Order
Senior Superintendent
To
Complainant/Opposite parties/S.F.
Typed by:- Sa/-
Compared by:-
